OraSure dumps Roche for Thermo Fisher in drug abuse Dx development deal

OraSure Technologies ($OSUR) is ending a deal with Roche Diagnostics ($RHHBY) to develop tests that can screen for substance abuse. But the Pennsylvania company has quickly cozied up to a new collaborator: Thermo Fisher Scientific ($TMO).

OraSure did not disclose why it changed its agreements, which involve producing new drug-testing assays for clients that follow federal drug-testing guidelines. The company was indirect, however, as far as how it disclosed the news. One OraSure announcement revealed that the company ended its deal with Roche in favor of "an agreement with another party," without mentioning Thermo Fisher by name. A separate announcement outlines the Thermo Fisher deal, mentioning that its "prior assay collaboration agreement has been terminated," without specifically referring to Roche.

OraSure may be best known at this point for its over-the-counter OraQuick HIV test that won FDA approval in 2012. But the company also develops oral fluid diagnostic and collection devices to detect and diagnose a variety of other things.

That's where OraSure's partnership with Roche Diagnostics came in. The two companies had a deal to develop fully automated oral fluid assays to test for drug use that could be used with OraSure's Intercept specimen collection device. While the Roche collaboration is over, it will remain in force on a transitional basis. According to OraSure, Roche will continue to supply five FDA-cleared assays developed as part of their partnership for up to 5 years. Roche will also pay OraSure $8.3 million and provide transitional product support, with expectations that it will pay up to $5.5 million more depending on when that supply obligation ends.

OraSure's deal with Thermo Fisher appears to be broader. OraSure said the new deal calls for Thermo Fisher to develop and supply up to 12 fully automated oral fluid assays to test for drug abuse, to be used with a next-generation Intercept oral fluid specimen collection device. OraSure also gains the right to purchase and resell the assays in the U.S. and some foreign countries, pending regulatory approvals. Tests from this new collaboration could reach domestic criminal justice and forensics-related clients by the second half of 2014, OraSure said.

Intercept is FDA-cleared to detect marijuana, cocaine, opiates, PCP, amphetamines, methamphetamine, barbiturates, methadone and benzodiazepines.

"The new agreement with Thermo Fisher is an important strategic development for our Substance Abuse testing business," OraSure President and CEO Douglas Michels said in a statement.

- read OraSure's Roche announcement
- here's OraSure's Thermo Fisher release

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